How Does Assignment of Benefits Agreement Affect Louisiana Homeowners?
Homeowners in Louisiana know that rebuilding after a natural disaster involves a number of complex legal and insurance issues. Insurance for accidents and property insurance is crucial in getting work done on your home, as are the contractors hired to do the work.
If you need help with a legal issue surrounding the process of rebuilding in Louisiana, Montiel Hodge is the firm for you. Get in touch with our expert attorneys today.
Hurricane Ida and AOB
Hurricane Ida brought an onslaught of out-of-state contractors into Louisiana, just as every hurricane will do. The rebuilding process won’t be completed overnight, and there is an increased demand for roofers, construction workers, and contractors alike in order to get all the work done.
In many cases, contractors will do the work under what’s called an ‘assignment of benefits.’ An assignment of benefits, or AOB, is a contract that entails you signing over your insurance claim rights to the contractor. Under this contract, the contractor has the right to payment on your insurance claim and, in return, they agree to repair your property.
Considering an AOB
If you’re considering an AOB, you must have a comprehensive understanding of the repairs that your property is facing. You also need to know what exactly the contractor is willing to do. If the contractor isn’t willing to restore your home to the condition it stood in before the damage, that’s a red flag.
Your insurance company is obligated to make adequate repairs to your property, which means that the contractor should be obligated to the same thing.
If they don’t do it, your insurer may try for insurance subrogation, which is a right that your carrier has to pursue legal action against a third party that caused an insurance loss to the insured party.
Are Assignment of Benefits Good for Homeowners?
AOB isn’t necessarily good or bad. In many cases, contractors will perform valid work for customers under an AOB agreement, which allows people to return to their homes and businesses at a faster rate.
But there are known problems, too. In some cases, contractors haven’t been financially capable while operating under an AOB, and they can’t do the work they promised while waiting for the insurance company to pay the claims.
This is why it’s important for homeowners to do their due diligence before agreeing to an AOB or hiring a contractor.
Is AOB Right for You?
Before you rush into an AOB agreement, get in touch with Montiel Hodge. Our expert team of attorneys will help you figure out whether or not it’s the right decision.
